Worked Examples and Checklists
Credit card cash advance costs in Australia: fees and interest from day one
What counts as a cash advance on an Australian credit card, how the fee and daily interest add up, cash-like transactions to watch for, and an illustrative cost example.
A cash advance is any use of a credit card to get cash or something the issuer treats like cash: ATM withdrawals, cash out at a counter, and often transfers to other accounts, buying foreign currency or gift cards, and some gambling or digital wallet top-ups. Cash advances usually cost twice: a cash advance fee (a percentage of the amount or a minimum dollar fee) and interest at the cash advance rate from the day of the transaction, with no interest-free days. They also normally earn no points. On a rewards card, a single cash advance can cost more than a month's rewards. Check your card's Key Facts Sheet and terms for the exact list of cash-like transactions.
This guide belongs to the rewards card worked examples. Fees and rates below are illustrative.
What may be treated as a cash advance
| Transaction | Often treated as cash advance? | Notes |
|---|---|---|
| ATM withdrawal (Australia or overseas) | Yes | ATM operator fees may apply too |
| Cash out at a bank branch | Yes | |
| Transfer from the card to a bank account | Yes | Including "pay anyone" transfers from the card account |
| Buying foreign currency or traveller's cheques | Often | |
| Buying gift cards or prepaid cards | Sometimes | Depends on merchant category |
| Gambling and lottery transactions | Often, or blocked | Many issuers block them entirely |
| Funding some digital wallets or crypto exchanges | Sometimes | Depends on the issuer's categorisation |
| Paying some bills through third-party processors | Sometimes | Check the merchant category |
Categorisation follows the merchant code the merchant's bank assigns, so two similar purchases can be treated differently. If a transaction shows as a cash advance by surprise, ask the issuer how it was categorised.
Worked example: $500 from an ATM (illustrative)
Card terms: cash advance fee 3% or $3.50, whichever is greater; cash advance rate 21.99%; purchase rate 20.99%.
- Fee: 3% × $500 = $15.
- Interest from the withdrawal date to the payment that clears it, 30 days later: $500 × 21.99% × 30 ÷ 365 ≈ $9.04.
- Total: about $24.04 to borrow $500 for a month, an effective cost of roughly 4.8% for that month.
If the same $500 sits for six months: interest about $500 × 21.99% × 182 ÷ 365 ≈ $54.83, plus the $15 fee: about $70.
Overseas, add the foreign transaction fee (illustratively 3%, $15) and any ATM operator fee. See foreign transaction fees.
How payments are applied when you have a cash advance
Section 133BQ of the National Consumer Credit Protection Act 2009 requires your payment to be applied first to the part of the last statement's closing balance with the highest interest rate. A cash advance at 21.99% is therefore cleared before purchases at 20.99%. That helps, but:
- Interest on the cash advance runs daily until it is paid.
- If you do not pay the closing balance in full, your purchases may lose interest-free days as well; see interest-free days explained.
Cheaper alternatives to a cash advance
- Debit card withdrawals from your own funds, usually without interest.
- Pay the merchant directly by card, which is a purchase rather than a cash advance, if they accept cards.
- Talk to the biller about a payment plan, for utilities and other essential bills; energy retailers and many others have hardship programs.
- No Interest Loan Scheme (NILS) loans through community providers for essential goods and services if you are eligible.
- Centrelink advance payments if you receive eligible payments.
- Financial counselling: the National Debt Helpline (1800 007 007) is free.
For larger amounts, a personal loan with a fixed term may cost much less than revolving cash advances.
Blocking and alerts
Many card apps let you block cash advances, gambling, or overseas transactions, or set alerts for them. If you do not need cash advances, ask your issuer whether you can switch them off. This also reduces fraud risk; see fraud, chargebacks and the ePayments Code.
Paying off a cash advance faster
- Pay as soon as possible. Interest is daily, so paying 10 days earlier saves about 10 days of interest.
- Make a separate payment rather than waiting for the statement.
- If the cash advance is part of a larger balance, use the credit card payoff calculator to set a fixed payment.
- Reduce your cash advance limit if your issuer allows it.
Frequently asked questions
Do cash advances earn points?
Generally no. Rewards programs usually exclude cash advances and cash-like transactions.
Is a balance transfer a cash advance?
No, it is a separate transaction type with its own rate. But if the balance transfer promotion ends, many cards charge the remaining balance at the cash advance rate. See the balance transfer example.
Why was I charged a cash advance fee for a normal-looking purchase?
The merchant's category code may be one your issuer treats as cash-like. Ask the issuer to explain, and if you were not told about this in the terms, you can complain.
Does a cash advance affect my credit report?
The transaction itself is not reported separately, but your repayment history is. Frequent cash advances may also be visible to lenders who review your bank statements.
Sources and where to check
- ASIC Moneysmart — credit card cash advances and alternatives
- Federal Register of Legislation — National Consumer Credit Protection Act 2009, section 133BQ
- Services Australia — advance payments for eligible recipients
- Good Shepherd — No Interest Loan Scheme
- National Debt Helpline — free financial counselling, 1800 007 007
